5 Compelling Reasons Your Business Should Become a B Corp
Why Become a B Corp?
At the time of this writing, there are nearly 7,000 Certified B Corps, comprising a global community of companies that choose to use business as a force for good. Despite the growing B Corp Movement, many critics argue that the certification is not worth the time, effort, and money required because they don’t need the certification to create an impact. While this is true, there are still many compelling benefits to the certification that each year attract thousands of companies to complete and submit the rigorous B Impact Assessment.
Reason #1: To ‘B’ Different in the Eyes of Your Customers
The B Corp Certification offers a powerful investment in your brand, with some consumers even going so far as to only buy products from Certified B Corps. But why does the certification justify such strong preferences? According to a study by Nielsen, about 66% of consumers prefer to buy from sustainable brands, but the problem many of these consumers face is that they don’t know which brands are truly sustainable and which brands are simply pretending to be sustainable to bring in more sales. Because becoming a Certified B Corp is such a rigorous process that requires not only the attainment of 80 points on the B Impact Assessment and the altering of company governing documents, but also the verification by a B Lab staff member of the answers given on the assessment, consumers can trust that when a company has the Certified B Corp logo on their packaging, they earned it.
Reason #2: B Corp Certification Helps Attract and Retain Top Talent
Similarly, a study conducted by B Lab found that 86% of employees who work for B Corps had their decision positively influenced by their company’s B Corp Certification status. This is because there is an entire section of the B Impact Assessment specifically designated for workers, in which companies gain points for having superior benefits, DEI, compensation, employee ownership, and health and safety. The assessment also has a section for governance, in which companies are rewarded for ethical business practices, transparency of information, leadership and Board diversity, and the institutionalization of their missions. Together, the weighting of this sections make it incredibly difficult to become a Certified B Corp without being a high performer in these areas and once again, because a company’s assessment is audited by B Lab before approval, prospective hires can trust that the B Corps they apply to are meaningfully creating value for their employees. The demand from employees wanting to work for B Corps is so strong that there is an entire job site called B Work dedicated solely to connecting prospective employees with hiring B Corps.
Reason #3: Benchmarking Impact: The B Impact Assessment as an Organizational Development Tool
The B Impact Assessment is also a powerful tool for measuring both the qualitative and quantitative positive impact of an organization. Once the assessment is completed, the B Impact Score can then be used to benchmark a company’s impact over time and even create organizational roadmaps designed to strategically improve impact and stakeholder engagement over time. Startups, publicly traded companies, and every company in between have used the B Impact Assessment as a tool to grow their organizations and enhance their impact on various stakeholders as they go.
Reason #4: B Corps Have Remarkably Heightened Long-Term Profitability
Many critics of the B Corp Certification and sustainable business in general argue that improvements in social and environmental impact often come at the cost of profitability, but this is a myth that has been disproven by hundreds of studies examining the link between ESG performance and financial performance. For example, a 2020 study by MSCI found that companies with high ESG ratings outperformed those with low ESG ratings by an average of 6.4% per year in terms of total shareholder return over the past five years, and a 2020 BlackRock survey found that 88% of respondents from institutional investors worldwide agreed that incorporating ESG factors into their investment process is essential for managing risk and generating long-term returns.
While these studies and countless others document the link between profitability and ESG factors, there are also studies that prove the link between profitability and performance on the B Impact Assessment. A 2019 study found a statistically significant correlation between net income and point values in the B Impact Assessment, with an especially strong correlation present in the environment, customers, and workers sections of the assessment. These correlations were attributed to the benefits obtained by adopting the stakeholder-based practices necessary to become B Corp Certified, such as ease of attracting high-quality human capital and strong customer retention rates. An older study found that B Corps financially outperformed their public company industry competitors, both large and small. In truth, no dichotomy exists between positive impact and positive financial performance - especially when companies are able to adopt a win-win mentality in which solutions that enhance impact and profitability are sought out.
Reason #5: B Corps Get Access to The B Hive Network
Lastly, joining the global community of almost 7,000 B Corps grants new B Corps access to the B Hive, a network exclusive to Certified B Corps, where best practices are shared and like-minded businesses come together to improve their collective impact. The B Hive Network is particularly advantageous for B2B companies, who benefit from meeting potential clients through the network, who will immediately know that they share their values. This network has allowed the B Corp Movement to become a broader global movement where the sum is greater than its parts. Ultimately, embracing the B Corp Movement creates a virtuous cycle, where sustainable business practices drive business success, attract stakeholders who share your values, and amplify your positive impact on the world.
Interested in Becoming a Certified B Corp?
Torrey Project can help you through the whole B Corp certification process, from beginning the B Impact Assessment all the way to making the most of the certification once you achieve it! You can schedule a free consultation with one of our consultants by clicking the link below: